Gold prices in Pakistan rose on Monday, with the rate per gram reaching 29,490.89 Pakistani Rupees (PKR) from the previous 29,345.00 PKR on Friday. The price per tola increased to PKR 343,974.90 from PKR 342,274.30.

In international markets, geopolitical tensions are impacting gold prices. Russian President Putin mentioned resolving the Ukraine conflict, and Israeli Prime Minister Netanyahu responded to Yemen’s Houthi rebels’ missile attack.

Us Job Market And Currency Impact

The US job market added 177,000 jobs in April, surpassing expectations of 130,000, keeping unemployment steady at 4.2%. Despite this, uncertainties tied to US tariffs affect the US Dollar, which remains below a recent high.

Central banks, in an attempt to support their currencies, especially during economic upheavals, have been purchasing gold. In 2022, they purchased 1,136 tonnes of gold, marking the highest annual purchase on record.

Gold prices often vary with geopolitical instability and economic conditions. Lower interest rates typically increase gold’s appeal, while rising rates can reduce its attractiveness. Gold’s valuation also depends on the US Dollar’s performance since it’s priced in this currency.

This increase in domestic gold rates reflects broader trends we’ve been observing globally. The adjustment from Friday’s 29,345.00 PKR to Monday’s 29,490.89 PKR per gram suggests that local pricing is now more tightly tracking global reactions to political and economic uncertainty abroad. The tola rate jumping close to 344,000 PKR should not be dismissed as a routine fluctuation—it indicates firm buying interest, possibly from investors looking for safer ground amid ongoing volatility.

International And Domestic Price Drivers

Internationally, prices have been trending upwards, reacting to renewed flashes of tension in Eastern Europe and the Middle East. When Putin made public comments suggesting a possible resolution in Ukraine, it momentarily soothed nerves. Yet, almost instantly, Netanyahu’s involvement following missile threats from Yemeni rebels dialled the tension right back up. This sort of push-pull typically injects instability into gold markets, pushing demand higher as investors hedge against geopolitical risk.

The American labour market, meanwhile, posted job growth that beat forecasts by a fair margin—177,000 new roles instead of the projected 130,000. Unemployment holding at 4.2% keeps upward pressure on wage demands, and potentially inflation, alive. Ordinarily, such stats would support a stronger dollar, which in turn could prompt a dip in gold. But this time, tariff worries are doing just enough to weaken dollar sentiment, preventing any major retreat in gold prices. As a result, gold remains comfortably bid, despite what would typically be dollar-favouring data.

We also cannot ignore central banks. Their acquisition of over 1,100 tonnes of gold two years ago wasn’t an anomaly—it built the case for continued state-level accumulation. When major economies start protecting their reserves with metal, it adds a layer of passive support to pricing. This isn’t about daily trading quirks, but longer-term portfolio shifts by large institutional buyers, who clearly see value in physical hedges against currency pressure.

Interest rates are the other lever worth watching. Exactly how they move in coming months would give us more clarity. Lower yields tend to make non-yielding assets like gold relatively more attractive because the opportunity cost of holding them falls. For now, with inflation still stubborn in parts of the world, including parts of Europe and the US, rate cuts may not be immediate. But markets are already positioning forward expectations, and derivatives markets are picking up hints of these broader bets.

Currency perspective matters, too. Since gold is priced in dollars globally, any movement in the greenback’s strength ends up reshaping demand abroad. A weaker dollar reduces the cost of gold for holders of other currencies. That additional demand picks up and often appears in buying patterns in Asian markets, where jewellery and bar demand remains strong.

Moving forward, close attention should be paid to the interconnected nature of these factors—unemployment readings, central bank verbals, tactical escalations in key zones, and currency signals. Every data point or headline feeds the calculus. Volatility may continue to drift across sessions without clear direction, so calm, informed positioning will serve us best.

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